Aviation Logistics, 3pl Regional Head
Learning & Teaching Fellow (retired)
16th April 2012 From United Kingdom
KRA= Key Result Area
At first the BOD(Board of Directors) decides upon the Objectives of the company and set a period specific target.
This Target becomes the KRA of the CEO.
Then it get divided till it reaches the bottom most rung.
KRA of each person is linked and fulfillment of KRA will lead to fulfillment of objective set by BOD. Hence, if one person fail it will hamper the attainment of the desired result.
Let me give you an example:
The Company sells PCs
Suppose the objective decided by the Board is to make a profit of 500 crores in 3 years.
The KRA of CEO is to attain 500 crore profit in 3 years.
The CEO decides to attain this by making 400 crores by selling PCs, 50 Crores by Investing in Stocks and 50 Crores by improving productive cycle.
Now the KRA of Cheif Marketing Officer will be to sell PCs that will give the company 400 crore profit in 3 years. He will then set the KRAs for his subordinate in such a way that this target is achieved.
The Chief Operating Officer has KRA of improving the productivity cycle and producing PCs by which 400 crores can be achieved.
The Chief Finance Officer will as KRA have to look after investing in Stock and providing finance for purchase of raw materials, machinaries and others so that both Operation and Marketing can achieve their KRAs.
Chief People Officer (HR)[ Generally KRA are difficult or not done for HR since they are essentially support function, but in some cases it is done]
CPO as his KRA will have the following to provide for manpower and maintain harmonious industrial relationship so that there is no disruption in production or marketing. To provide for training for improving the skills to attain better productivity cycle, and to frame a compensation benefit structure by which the efficient employees can be retained.
The Chiefs than divide the KRA further to their subordinates. For Example the KRA of the Manager (Training) under CPO will have a KRA which will be to provide adequate training to the workforce. Hence, if Manager (Training) fails that will get reflected in the KRA of both CPO and COO and CEO. Simlarly, if the KRA of Asst. Manager (Training) is to locate the Training institutes which can impart quality training and he is not been able to achieve it. This will reflect in the KRA of Manager (Training), CPO, COO and CEO.
Suppose, if the Dy Manager (Training) is suppose to conduct the Training Programs, which could not be carried since funds for training which were supposed to be arranged by Dy. Manager(Finance) could not be arranged. Now, you can see this failure will reflect in the KRA of Dy. Manager (Fianace), Manager (Finance), CFO, Dy. Manager (Training), Manager (Training), and CPO, COO, and CEO.
Key Result areas- The measure of employees main result positives
KPI=Key Performance Indictor
Key business statistics such as number of new orders, cash collection efficiency, and return on investment (ROI), which measure a firm's performance in critical areas. KPIs show the progress (or lack of it) toward realizing the firm's objectives or strategic plans by monitoring activities which (if not properly performed) would likely cause severe losses or outright failure.
17th April 2012 From Singapore, Singapore
KPI is key performance indicator as mentioned by Mr. netaji. these are generally derived out of the entire scope of the activity assigned for a role. it will be in metrics of measurable results through which a rating of the employee is done to ascertain the increments or bonus or other benefits as decided by the managements. Ex,, if you are a HR guy handling employees then the KPIs may be like attrition control, ccounselling results against the resignations, attendance of the employees, no of programes invloving employees initiated by you ..etc
hope i am at least clear on the idea....
17th April 2012 From India, Madras